[Music] Lakeland Currents, your public affairs program for North Central Minnesota.

Closed Captioning is made possible by Bemidji Regional Airport, serving the region with daily flights to Minneapolis-St. Paul International Airport.

More information available at bemidjiairport.org Hello again, everyone.

I'm Ray Gildow, host of Lakeland Currents.

My guest today is someone who, I think he said this is his 5th time on our show, so maybe I have to call him a co-host now.

I'm not sure.

Ben Winchester is a rural sociologist with University of Minnesota Extension and he has been on our program a number of times talking about things like rural brain gain.

That's right.

And a number of topics.

Hasn't been on the show since four, five, six years now, maybe five years.

So, welcome back, Ben.

It's really great to have you here.

You are such a wealth of knowledge, and as I was telling you, across this state everybody knows you.

You must have done workshops in just about every corner of Minnesota.

Yeah, I think so.

It'd be interesting to do a little mind map of where I've been across the state.

Thanks, Ray.

Well, because it's been a long time since you've been on, maybe you could give us a little background of yourself.

You bet.

I am a rural sociologist.

I like to study rural things, all things rural, and have been able to do that my whole life through the University of Minnesota.

My undergraduate was in math and statistics at the University of Minnesota, Morris Campus, and that's where I first got accustomed to small town and rural life.

After growing up in Winona, which I used to think was a small town, but then I went to Morris.

I'm like, "Oh, this is a small town."

Then I realized that Morris is actually not a small town, that 85% of all the towns across the state are smaller than Morris.

But that's when I first got my feet wet, and I wanted to do rural studies, wanted to work with rural communities doing community development work.

And that's what I've been able to do, through the Center for Small Towns and through Extension at the university.

I've been able to do applied research on, migration studies is my primary area of study, and I look at who's moving in to our rural communities and how did they find that place, what are they doing for a job and then how do they get engaged and involved in our small town?

So that's really led me down a number of paths, over the years, to look at a primary study, which is newcomer studies.

And when you do work with groups, do you work out of your own home now or do you work out of the main campus or the Morris Campus?

Where do you work out of?

I work, the communities are my are my office, in many respects.

Yeah, I work from home, for a portion of my time.

But, really, it's being on the road.

It's being in our small towns, working with our groups to help, you know, better our communities.

And I know you work with a team because I've had some of your other team members on here.

And how long have you been doing this?

So, I've been with the university for about 24 years, with extension 18 or 19 or so.

But, yes, I'm in the sliver of Extension called Community Vitality, and Community Vitality really I think a lot of people know 4-H, and that's our Youth Development Center, but we've also got other centers around agriculture and natural resources.

But I'm in a sliver called Community Vitality, and we do work at the community level around economic development, community development, and tourism, too.

Our Tourism Center has been a really valuable part of our center, to help understand the kind of composition of our rural economy, as it relates to tourism.

And, you know, here in Minnesota we've got a lot of tourists.

We've got a lot of places that people love to visit.

So, it's been really rewarding to work inside of a center with so many, you know, talented folks that do things like, you know, economic impact analysis.

We do a retail trade analysis to help people understand how far of a capture area they've got for their, you know, economic activities.

Or just, in general, how to develop our better leaders.

How to ensure that we've got a crop of people coming into our small towns that are willing and able and respected to lead our communities into the next, you know, really, generation.

And, when you talk about rural communities, do you have a population size limit of the groups you work with?

Or is it any city?

Generally, outside of the Twin Cities Metro is who we work with in Extension, within Community Vitality.

Though we do have educators in the metro, too, our kind of bread and butter is our rural programming, because there tends to not be as many groups to help our rural communities out.

So, we've got a big value there in terms of the the capacity that we've got across the state and educators in these different areas to serve all the different ways our small towns have become more diverse.

So, you know, our small towns look different than they used to.

And this is a big part of what I talk about, it's what I call rewriting the rural narrative.

And the idea here is that the narrative we use to describe our small towns and rural places is really terrible, but meanwhile, the people in the towns love it.

And so I'm trying to always reconcile like, "Why do we have a common narrative that's so terrible, that is based upon things that happened in the past?"

We, you know, gutted many main streets.

Or we had many businesses migrate away from the small towns to the regional centers.

Manufacturing has come and went as a primary driver for our economic engines.

And really today, education and health services are the primary drivers of our rural economy.

But, at the same time, no town is a one-stop shop.

Pillager, you're not going to do it all by yourself, right?

We live in these regions.

And so, I take that negative narrative around living in the middle of nowhere, and we talk about how we really live in the middle of everywhere.

We put our home in one place, we work in another, we shop and recreate in this vast region.

We lived in Hancock for a long time, and we had Buddies Bar and Grill in Hancock, but I didn't want to eat at Buddies' every time we wanted to eat out, right?

We would enjoy everything in the region.

And this is where we get at.

So, when we try to exemplify a little bit more about how vast of a region we live in, it does, it re-envisions how we look at ourselves, how we look at our neighbors, how we look at our economy, because it is much more regional than ever before, much more diverse than ever before.

And really our towns are well desired.

I mean, if we listen to the common narrative, you would think that nobody wants to live here.

The lucky few escape.

We've got a brain drain, you know.

But at the same time, how did we arrive at this point at which we have such a negative narrative?

But, on the other hand, I can't find a home to buy.

Like, there's not a home for sale.

And we know that, right now, the pace of change is very slow in our small towns, and it happens one household at a time.

So really, it's these areas that we look at, and more, to help communities really understand, kind of, the larger picture within which we're operating, and to let them know that if you have to close your grocery store, like that's probably not your fault, right?

These are broader trends that influence everybody.

And what does differentiate one town from another though, Ray, is how well we work together.

And that is called social capital.

So when you do have these trends that impact everyone, what differentiates one place from another?

It is, how well do we work together.

We talked, I think, about the brain drain back in about 2018 or so, and we were seeing a lot of change happening in that period of time.

What has the virus done to our communities?

Right.

I think, when the pandemic first hit and there was a new attraction of people trying to move into our rural places or look to our rural places, I think they expected to find plenty of homes to buy.

And what they found was, our communities were filled.

Our communities, in fact, were filled.

And this is the research that we've done around the brain gain, is that since the 1970s, people have been consistently and regularly moving into all rural communities, and when they're aged in their 30's, 40's, and 50's.

And so, while on one hand, you do lose your 18 year olds, but on the other hand, you know, the brain drain, you lose 18 year olds, but on the other hand you're bringing in people in their 30's, 40's, and 50's.

So this filled up our housing stocks, since the 70's- really the 90's, filled up these housing stocks.

So, when the pandemic hit, a lot of people are like, "Oh my gosh.

This is going to reinvigorate our small towns."

And all we did was say, "Welcome to the party.

We've been here doing this for decades now."

And so, if anything, it just exacerbated the home prices.

Because in many ways, the homes that did go on the market then were attacked with, you know, with people all wanting that home.

So, when you look at it from the outside, all you see is a full housing stock in our view, in a full housing stock home values get exacerbated, which then leads to all these other difficulties around people that may be low income or service workers.

Can they afford to live in the communities within which they work at this point?

So there are a lot of very interesting dynamics at foot.

But again, the pace of change is very slow.

In our rural communities we do have a lot of homes that are owned by people over the age of 70.

A full third of our rural homeowners are over the age of 70, and these people don't have kids, right, they're not going to have children.

They tend to be out of the workforce now.

So, whenever I would get a call, and I would get asked don't you have a workforce housing shortage?

Like, not really.

We have plenty of workforce housing; it's currently occupied by our seniors.

So typically, in the past, seniors once they hit the age of 67, they would move out of their homes.

They would move into rentals or with family or whatever.

Literally you could watch that bar chart go down.

And what happens, then, when a senior household moves out of that family home, there's room for somebody else to move in.

There's somebody to take on the local job.

There's someone to bring in kids, and we know that 50 percent of newcomers are bringing in children.

Fifty percent of these households have kids.

So when you start to substitute out these older households with a newer household, we do see a pattern of growth in our rural communities over the next 20 years.

And, that is not only are a third of our homes owned by people over the age of 70, but another 45 percent are baby boomers.

So 75 percent of our homes are going to turn over in our rural communities, and this is unprecedented.

This has never happened before.

And why is that?

It's because this generation today of people over the age of 70 are staying in their homes, when typically in the past the other generations moved out.

This is the very first one that stayed.

So we wonder why we've had a workforce housing shortage for the past 15 years?

It's because it's inhibited by our inability to move seniors out or over.

So, we have to be real careful about how we talk about this.

We're not trying to kick people out of their homes, but it actually inhibits the ability for us to grow our community when there's nowhere for people to live.

I wonder is some of that driven by the access to health care?

We want more people who are healthier to stay home maybe do telecommunications.

That's right.

And I think also, I mean we do, AARP has done a lot of research around why our seniors don't move.

It's anxiety or they're comfortable in the home.

They raised their kids there.

They want room for the kids to come back and visit when they do that.

But, ultimately, what we find out is those are our best intentions and when in reality we find out that what happens is you end up having to move at some point.

You have to move out at some point, but then all those anxieties and discomforts are only exacerbated because you didn't plan.

At the same time we've got a lot of kind of structural pieces that are keeping people in their homes.

We have a whole age in place mentality, and there is actually millions and millions of dollars in resources to help keep people in their homes.

So we'll do things like help make them handicap accessible bathrooms or put on a ramp on the home.

But, again, we're investing a lot of dollars not in equity but in livability expenses.

So meanwhile now, the senior will, yes, be able to stand that home longer but if planning is not made, which we generally see does not happen, is that people then have to move in emergency mode.

And like something happens, I've got to move out, my kids have got to sell the house in the next two weeks, or whatever it is, but the point is we don't really plan for migrating out of our homes.

We don't have succession plans for our housing stocks.

So when we do see these types of transitions happen, you don't have control, you don't have choice.

So, I would have loved to have had my mom stay in Hancock, but there was nothing available because we didn't know there was a waiting list.

If we would have planned for this we could have a year and a half ago put her on the waiting list, and then when she was ready to move, we would have been on that list.

But nobody plans for moves like this.

So this is what I call the policy of best intentions.

We intend to stay in our homes forever.

It doesn't really work out like that.

But, meanwhile, locally your employers are saying I've got nowhere for my employees to live.

It's inhibiting my ability to actually welcome in this new workforce, and all these people who just retired now are not moving out, and that inhibits the ability for people to move in.

So it's an interesting churn of housing and the implications of that.

You know you said healthcare and education are the two big economic drivers for rural Minnesota.

We have a phenomenal group of hospitals in our area from Aitkin to Perham.

I mean we really have some great ones.

CentraCare down in Saint Cloud.

Essentia Health all the way up to Duluth.

Do you see a time coming when all of these baby boomers and all these people who are older are starting to go away?

What's that going to do to that industry that's been growing, growing, growing, growing?

Right.

There still will be no shortage of older people.

The population is not going down after the baby boomers move on.

So I'm in the Gen X generation, which nobody cares about us.

We're in between the baby boomers and the millennials, right?

But the millennials are actually quite large, too.

So, even though, if we were to say build move over housing, so let's build some patio homes for people to move into.

Before you get to senior living, right, you've got a continuum of life, and there's things like patio homes and condos and you know things where you don't have to do maintenance.

So when we think about the transition of people through these different housing choices, are there opportunities for people to move over?

Because right now we know that 20 to 30 percent of all the income coming into a rural county does not come from a job, it comes from transfer receipts.

And that is old aid social security.

So, you know, the Social Security Administration like four pager you get - it's like when you retire you're going to get 212 dollars a month or whatever that is, hopefully it's more than that.

But Social Security Administration as well as transfer receipts like Medicare and Medicaid, a full 20 to 25 percent, one in four dollars currently is going toward any senior related activity, either retirement or Medicare/ Medicaid.

So, my point now is imagine if you don't have anywhere for your seniors to move over to and then they're going to move out.

If they move out of your region and are out of your community, they're going to take these transfer receipts with them, and right now we know these transfer receipts are 100 spent in your community.

They're spent already.

When you're retired spending your retirement dollars, you're not putting money away for retirement anymore, you're spending it all.

And you're spending it locally.

So my question would be to what extent is the medical industry already such a large impact on your community that you should be investing in this more, maybe in order to keep these seniors around in their continuum of life before they hit the continuum of care.

Because if they don't, they're going to move out and take these transfer receipts with them.

So, essentially, we've got a very interesting mix in terms of the local economy that tends not to be recognized, because you tend to think about just the jobs and the people have the jobs there.

But actually, when you think about the senior service economy, it is significant and this number is not going down.

We're only getting more and more older people, and then once the Gen Xers really kind of weave through there, the millennials are bigger behind them.

So we are not building for a temporary thing here.

We are building for the future of our rural communities, and when we've got all churns of housing, because right now we've got a lot of family homes, but not a lot of independent living patio homes.

And when we talk about senior housing, too, it's not just, you know, living in the senior facility with services and care.

We talk about a continuum of life before you get to your continuum of care.

If that's not going to change, if the health care is going to probably stay similar to what it is, what do you see happening with education?

Because I've read where we're losing students, we're losing younger people and we've already seen that impact in some of our rural schools.

But what do you see down the road there?

I'm real hopeful here, actually, because when you again you kind of use that data point of 75 percent of your homeowners are baby boomers and older, maybe some of the younger baby boomers have kids yet.

But imagine now when those 75 percent of those homes are going to turn over, what are you going to substitute in?

You're going to substitute out one senior household, and you're going to substitute in one family household.

And we know 49 percent of newcomer households have kids and then we've got a return to multi-generational housing, too.

So I expect to see, once we get these one and two person households, kind of, churned out of our communities, they're being substituted with two to five person households.

So I expect to see actually our rural population go up, our school enrollments go up, and we are actually seeing this in many parts of the country right now.

Really?

These parts of the country where historically they had been the oldest, so 25 years ago, when we made the maps about the drain of rural and you could immediately see in the Great Plains, Nebraska, Panhandle Texas, all these places that were the oldest parts of the country, they are now the ones that are turning over because the oldest are now the dead, to put it bluntly.

And when people pass over - you have to talk about this in some way, you have to talk about end-of-life stuff, but essentially what happens when these people move out or move on is you open up that home for younger people to move in, and we've seen this.

Southwestern Nebraska, we've got a whole cluster of counties down there that are seeing a rise in the percentage of homeowners that are under the age of 45.

Wow.

And they are reinvigorating school enrollments, they're bringing the populations up.

So there's a lot of hope I've got in this, but we've got a lot of concern first and foremost for the population that's currently living here.

Do they have some place to move over to?

Can we actually engage in a conversation about this churn of housing in our rural communities when typically the conversation is all about workforce housing?

And we can't just build housing because we wish it.

Like that's a ridiculous notion.

Housing gets built where there's income.

So we have many across our rural communities, we have a shortage, and we think the only path out of that is to build new.

And that's not a path for me.

The path for me is to provide move over, not building new workforce housing, it's building patio homes, it's building independent living.

Ottertail County, they did this.

They've got a Tri-City opportunities group up there, and we had presented this housing data a couple times over the years, and then at one of the meetings there's a developer there who had said, "I was really interested in some of this data.

I put up these fourplexes, these patio homes, like two, two bedrooms in the middle, and one bedrooms on the end, and they sold the moment I broke ground.

And then I put up four more, and then those sold the moment I broke ground."

How did I not know this was a market was his point, because I think a lot of the housing studies that get done all we talk about is workforce housing, we need more family homes just because there's no room for these new workers and we imply then that we need to build more.

When actually, it's occupied.

Those homes are currently occupied.

So I believe there's a ton of work to be done just on the housing stocks.

What condition are those homes in?

Sometimes you may actually have the people who are in there, maybe a senior household eligible for low-income programs to help rehab that entire home.

But if you wait, and that person moves out, the new person moving in is above that income limit.

Now they have to incur that 20 to 30 thousand dollar expense.

So we've got some real conversations at the community level that we try to advocate for to talk about, like how do we take care of our housing stock when typically nobody is responsible for our housing stocks, right.

Housing stocks are seen as a private asset, like I'm not going to tell your mom what to do, right, but at the same time like my employer's been short on employees for five months.

I've got nowhere for people to live.

How do we encourage this type of recognition that there are opportunities for people to move in if we can move over and move out of those homes.

What do you see happening, since the pandemic a lot of our small businesses have taken a real hit.

I think what hurt them a lot was that the big box stores were allowed to stay open where a lot of these smaller ones weren't.

We don't need to get into the politics of that, but it seems like a lot of the restaurants, a lot of the small businesses in the rural areas have been closed or taken a hit.

Do you see that opportunity coming back again then with some of the growth you're talking about?

No, that's right.

We have and we do see a return, the retail sales are back we, I mean we see consumption numbers are through the roof, state tax collections are very high on consumptive-based tax bases.

So it's very interesting to see like to what extent we're actually able to support the businesses today.

Because I think part of this, too, is I want to go back to even the recession in 2008.

Like many times, people when they think about rural businesses, they think they're struggling and not doing very well.

Well I just like to remind folks that a lot of times the businesses that we have today were already weathered by the recession the 2008-2009.

So the businesses we have are actually stronger than ever, and so we do talk a lot about business succession planning.

We made, it's supposed to be like 65 percent of our business owners are over the age of 60, you know, and in the next 10 years they're going to want to migrate out of those business ownerships and how do you migrate those into the new hands?

If you have a dying narrative like, hey, why would I buy your dying business, right?

But we're not dying.

So we do know there's different tools we can use today too, to even understand the extent to which people visit your businesses, and we make smarter decisions about our businesses.

So we have seen retail numbers kind of return when people are much more optimistic than they were a year into the pandemic.

Now inflation is fighting against some of the optimism that is out there.

But really the businesses that we've got have been transformed by this technology.

In many ways some businesses should have been transformed but weren't.

So, in some respects, the businesses that we've got in hand today, I'm super optimistic about, the strength of them to persist through these next number of years, because we went through the hard part already, we have went through those transformations.

But now as we try to accommodate these businesses for new wage expectations, for new inflationary levels on price, on pricing, there's going to be kind of a shake-out.

We don't know how it's going to really look, but we can use, there's different tools out there, we've got mobile marketing data tool.

You can use, you know, our cell phones to look at how far people go and what types of people come in, what other businesses did they go to before you came to your place, what other businesses did you go to after.

DeeDee LeMier had worked on a study, an economic impact analysis, with Brigid Tuck and Brainerd to better understand the extent to which the YMCA is an attraction and a center for the region.

And it is.

They use mobile marketing data.

So here, in Extension, we've got all these new tools that we can use around mobile data.

It's very fascinating to look at this.

And you see this middle of everywhere concept, that people may live in one place, but they're coming into Brainerd.

They'll go to the Y, but they're not just going to the Y, they're doing other things, too.

And what other things are complementary to that?

And you start to build really interesting models around: hey people that you know go to the bait store what other compliments do they have in types of business environments, so I think there's a lot of granularity on some of the upcoming data that we've got that becomes a very interesting perspective into looking at how the businesses are operating differently.

We don't have a good idea yet as to what, how this all looked, like what the pandemic did to our communities, yet.

I think it's fairly early.

A lot of times retail data lags a year or two behind, and then sometimes behaviors lag, you know, our behaviors change, and it doesn't really change right away.

It may take six months or a year for our behaviors to change and then it shows up in the data.

So it's very interesting to see when we have major events like this the extent to which it takes time to trickle through the data sets.

And we're starting to see some of that in our retail trade data.

We're starting to see that in some of the micro data that we see on the mobile data points, too.

So we are seeing a return.

The mobile data is a really great way for us to look at how it, kind of, commuting collapsed during the pandemic, and then how people have been brought back out and the extent to which they're doing that.

So I'm still very optimistic.

People, you know, still love our communities.

They still spend money in our communities.

I think we're facing more pressures around inflation, and we're starting to better understand the extent to which our businesses are going to reconfigure themselves around the new wage and labor kind of relationships that we've got, too.

Almost everywhere, every town you go to, help wanted signs.

How do you see the labor trends fitting into this helping those?

I just was at a restaurant here a couple days ago, and they said would you please give us extra time, we're short-handed here, we don't have the people.

And that's a universal theme I think just about everywhere.

No, that's right.

What's happened?

Why is this such a big problem?

I would say we don't have a labor shortage, we have a housing shortage.

So that's what's going on.

So on one side, right, we have had the biggest driver has been the retirements.

The deed folks will tell you number one this is their greatest retirement generation we've ever seen.

But, again, my model then is all these folks in our smaller towns retire but then they don't move out of their homes, and there's it's hard to substitute in the labor that you just lost and for your local employer, when there's nowhere for them to move into.

So for me, again, it's not necessarily a labor shortage.

I mean you're starting to see more pressures on the wage side, which if you are paying low wages, you're not going to get anybody to work for you.

This is the cold reality, and as a rural sociologist I'm very interested to look at the demands that labor makes upon the economic system and the extent to which labor actually then shapes some of the economic opportunities presented.

So, if labor is saying I need to be paid more, and your local service Industries can't afford that, they are going to be called out of that business environment.

So we have to really reimagine and reprioritize where do we put our money, you know.

What jobs do we have?

Are we going to see cooking at home be on a 400 percent increase because there are so few places to go out to for prepared food?

So we are seeing these labor shortages everywhere.

I go up to Rainy Lake.

The restaurant up there is the same thing, minimum number of people that they can find to work there, and then you have to have a minimum number of people that they can serve at that time or a maximum number that they can serve.

So, we are seeing a lot of these kind of nuances in mostly the service industries right now, but the other industries seem to be doing okay.

Labor's got a lot of choices right now.

I mean if you're a laborer in this market, if you're a Gen X, you're a millennial or anybody, I tell yoy, you've got power, you've got a lot of choice coming up.

So what we do know is that from our newcomer studies, that newcomers aren't just moving for a job.

The number of people moving for a job went from 41 percent in a study we did of newcomers before the pandemic, and then a study in Montana a year into the pandemic, that number went down to 35 percent.

So now people moving for a job isn't the first and foremost reason why they're moving in.

They may be bringing the job with them.

They may look for a job eventually.

But people move to our rural communities for quality of life, safety and security, you know, low cost of housing, just in general connection to nature, access to recreation.

Those are the primary motivations.

So when we talk about labor and its relationship to the community, I talk about, like, when we're trying to bring people in, this resident recruitment model, it's a life-work balance.

It's not a work-life balance because work-life implies work is still first, and what we say is people are putting their life first.

So if I'm trying to recruit a new laborer in, and all I can show them is the shop floor and my wage and benefits package, that's not enough.

You need to show them what their life is like.

So, Erik Osberg, Ottertail County, he takes people out fishing for an hour, because you need to have them realize this is what your life is going to be like.

If you can turn that key a little bit in people's mind to be like, man, it's going to take me six minutes to drive home, hook up the boat, and get on the lake, you know, or get to the lake.

So, I think there's a lot of good opportunities that are distinctly rural, in terms of the new kind of preferences that people have, Americans have, for their lives, rural tends to fit that picture real well.

Ben, you're just fascinating.

We're out of time.

We are.

Very interesting, and I hope people can get a hold of you, you still work... How do they get hold of you?

Yeah, so, you can just go to the University of Minnesota Extension webpage, you can google Minnesota brain gain, and you will find our brain gain landing page, but otherwise connect with an educator locally.

We are all across the state within the University of Minnesota Extension.

Thank you, great having you on again.

My pleasure, Ray, thank you.

You've been watching Lakeland Currents.

I'm Ray Gildow.

So long until next time.

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